##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 001-34211
 
 GRAND CANYON EDUCATION, INC.
 (Exact name of registrant as specified in its charter)
 
 DELAWARE(State or other jurisdiction of 
Incorporation or organization)
    
    20-3356009(I.R.S. Employer
Identification No.)
 3300 W. Camelback Road
Phoenix, Arizona 85017(Address, including zip code, of principal executive offices)
 (602) 639-7500
(Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



GRAND CANYON EDUCATION, INC.
FORM 10-Q
INDEX
 PagePART I  FINANCIAL INFORMATIONItem 1 Financial Statements
    
    
    3Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4 Controls and Procedures
    
    
    17PART II  OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    17Item 1A Risk Factors
    
    
    17Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3 Defaults Upon Senior Securities
    
    
    18Item 4 Reserved
    
    
    18Item 5 Other Information
    
    
    18Item 6 Exhibits
    
    
    18SIGNATURES
    
    
    19Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 GRAND CANYON EDUCATION, INC.
Income Statements
(Unaudited)
 Three Months EndedMarch 31,(In thousands, except per share data)
    
    2010
    
    
    2009Net revenue
    
    $
    89,326
    
    
    $
    55,459Costs and expenses:Instructional costs and services
    
    
    31,812
    
    
    
    17,968Selling and promotional, including $2,347
and $1,516 to related parties for March
31, 2010 and 2009, respectively
    
    
    26,876
    
    
    
    19,575General and administrative
    
    
    10,878
    
    
    
    8,833Exit costs
    
    
    89
    
    
    
    Royalty to former owner
    
    
    74
    
    
    
    74Total costs and expenses
    
    
    69,729
    
    
    
    46,450Operating income
    
    
    19,597
    
    
    
    9,009Interest expense
    
    
    (344
    )
    
    
    (667
    )Interest income
    
    
    61
    
    
    
    109Income before income taxes
    
    
    19,314
    
    
    
    8,451Income tax expense
    
    
    7,834
    
    
    
    3,376Net income
    
    $
    11,480
    
    
    $
    5,075Earnings per share:Basic income per share
    
    $
    0.25
    
    
    $
    0.11Diluted income per share
    
    $
    0.25
    
    
    $
    0.11Basic weighted average shares outstanding
    
    
    45,674
    
    
    
    45,474Diluted weighted average shares outstanding
    
    
    46,325
    
    
    
    45,821
 The accompanying notes are an integral part of these financial statements.
  3




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GRAND CANYON EDUCATION, INC.
Balance Sheets
 March 31,
    
    
    December 31,(In thousands, except share data)
    
    2010
    
    
    2009(Unaudited)ASSETS:Current assetsCash and cash equivalents
    
    $
    97,883
    
    
    $
    62,571Restricted cash, cash equivalents and
investments (of which $170 is unrestricted
at December 31, 2009)
    
    
    6,203
    
    
    
    3,403Accounts receivable, net of allowance for
doubtful accounts of $7,848 and $7,553 at
March 31, 2010 and December 31, 2009,
respectively
    
    
    13,890
    
    
    
    13,802Deferred income taxes
    
    
    7,146
    
    
    
    6,685Other current assets
    
    
    4,269
    
    
    
    3,785Total current assets
    
    
    129,391
    
    
    
    90,246Property and equipment, net
    
    
    75,127
    
    
    
    67,370Investments
    
    
    
    
    
    
    360Prepaid royalties
    
    
    7,128
    
    
    
    7,311Goodwill
    
    
    2,941
    
    
    
    2,941Deferred income taxes
    
    
    5,633
    
    
    
    5,956Other assets
    
    
    1,749
    
    
    
    554Total assets
    
    $
    221,969
    
    
    $
    174,738LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilitiesAccounts payable
    
    $
    9,317
    
    
    $
    8,762Accrued liabilities
    
    
    23,127
    
    
    
    18,103Accrued estimated litigation loss
    
    
    5,200
    
    
    
    5,200Accrued exit costs
    
    
    353
    
    
    
    832Income taxes payable
    
    
    8,253
    
    
    
    2,261Deferred revenue and student deposits
    
    
    45,283
    
    
    
    23,204Due to related parties
    
    
    2,574
    
    
    
    1,174Current portion of capital lease obligations
    
    
    725
    
    
    
    751Current portion of notes payable
    
    
    2,121
    
    
    
    2,105Total current liabilities
    
    
    96,953
    
    
    
    62,392Capital lease obligations, less current portion
    
    
    692
    
    
    
    868Notes payable, less current portion and other
    
    
    25,188
    
    
    
    25,450Total liabilities
    
    
    122,833
    
    
    
    88,710Commitments and contingenciesStockholders equityPreferred stock, $0.01 par value, 10,000,000
shares authorized; 0 shares issued and
outstanding at March 31, 2010 and December 31,
2009
    
    
    
    
    
    
    Common stock, $0.01 par value, 100,000,000
shares authorized; 45,702,415 and 45,657,946
shares issued and outstanding at March 31,
2010 and December 31, 2009, respectively
    
    
    457
    
    
    
    457Additional paid-in capital
    
    
    71,898
    
    
    
    70,100Accumulated other comprehensive loss
    
    
    (314
    )
    
    
    (144
    )Accumulated earnings
    
    
    27,095
    
    
    
    15,615Total stockholders equity
    
    
    99,136
    
    
    
    86,028Total liabilities and stockholders equity
    
    $
    221,969
    
    
    $
    174,738
 The accompanying notes are an integral part of these financial statements.
  4




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GRAND CANYON EDUCATION, INC.
Statement of Stockholders Equity
(In thousands, except share data)
(Unaudited)
 AccumulatedAdditional
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Par Value
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    TotalBalance at December 31, 2009
    
    
    45,657,946
    
    
    $
    457
    
    
    $
    70,100
    
    
    $
    (144
    )
    
    $
    15,615
    
    
    $
    86,028Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,480
    
    
    
    11,480Unrealized loss on hedging
derivatives, net of taxes
of $98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (147
    )
    
    
    
    
    
    
    (147
    )Unrealized losses on
available for-sale
securities, net of taxes of
$3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Reclassification
of realized gains on available
for-sale securities, net of
taxes of $12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,310Exercise of stock options
    
    
    41,855
    
    
    
    
    
    
    
    502
    
    
    
    
    
    
    
    
    
    
    
    502Excess tax benefits from
share-based compensation
    
    
    
    
    
    
    
    
    
    
    259
    
    
    
    
    
    
    
    
    
    
    
    259Share-based compensation
    
    
    2,614
    
    
    
    
    
    
    
    1,037
    
    
    
    
    
    
    
    
    
    
    
    1,037Balance at March 31, 2010
    
    
    45,702,415
    
    
    $
    457
    
    
    $
    71,898
    
    
    $
    (314
    )
    
    $
    27,095
    
    
    $
    99,136
 The accompanying notes are an integral part of these financial statements.
  5




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GRAND CANYON EDUCATION, INC.
Statements of Cash Flows
(Unaudited)
 Three Months Ended March 31,(In thousands)
    
    2010
    
    
    2009RestatedCash flows provided by operating activities:Net income
    
    $
    11,480
    
    
    $
    5,075Adjustments to reconcile net income to net cash provided by operating activities:Share-based compensation
    
    
    1,037
    
    
    
    764Excess tax benefits from share-based compensation
    
    
    (492
    )
    
    
    (9
    )Amortization of debt issuance costs
    
    
    16
    
    
    
    Provision for bad debts
    
    
    4,774
    
    
    
    3,295Depreciation and amortization
    
    
    2,661
    
    
    
    1,632Exit costs
    
    
    (479
    )
    
    
    Deferred income taxes
    
    
    (27
    )
    
    
    (79
    )Other
    
    
    (39
    )
    
    
    (14
    )Changes in assets and liabilities:Accounts receivable
    
    
    (4,862
    )
    
    
    (4,362
    )Prepaid expenses and other
    
    
    (1,655
    )
    
    
    185Due to/from related parties
    
    
    1,400
    
    
    
    1,210Accounts payable
    
    
    1,912
    
    
    
    2,435Accrued liabilities
    
    
    5,024
    
    
    
    1,920Income taxes payable
    
    
    6,251
    
    
    
    3,381Deferred revenue and student deposits
    
    
    22,079
    
    
    
    21,142Net cash provided by operating activities
    
    
    49,080
    
    
    
    36,575Cash flows used in investing activities:Capital expenditures
    
    
    (11,591
    )
    
    
    (4,500
    )Change in restricted cash and cash equivalents
    
    
    (2,931
    )
    
    
    1,187Purchases of investments
    
    
    
    
    
    
    (11
    )Proceeds from sale or maturity of investments
    
    
    487
    
    
    
    Net cash used in investing activities
    
    
    (14,035
    )
    
    
    (3,324
    )Cash flows provided by (used in) financing activities:Principal payments on notes payable and capital lease obligations
    
    
    (727
    )
    
    
    (384
    )Excess tax benefits from share-based compensation
    
    
    492
    
    
    
    9Net proceeds from exercise of stock options
    
    
    502
    
    
    
    247Net cash provided by (used in) financing activities
    
    
    267
    
    
    
    (128
    )Net increase in cash and cash equivalents
    
    
    35,312
    
    
    
    33,123Cash and cash equivalents, beginning of period
    
    
    62,571
    
    
    
    35,152Cash and cash equivalents, end of period
    
    $
    97,883
    
    
    $
    68,275Supplemental disclosure of cash flow informationCash paid for interest
    
    $
    195
    
    
    $
    673Cash paid for income taxes
    
    $
    1,598
    
    
    $
    138Supplemental disclosure of non-cash investing and financing activitiesPurchase of equipment through capital lease obligations
    
    $
    
    
    
    $
    2,116Purchases of property and equipment included in accounts payable
    
    $
    (1,357
    )
    
    $
    658Tax benefit of Spirit warrant intangible
    
    $
    259
    
    
    $
    4,107
 The accompanying notes are an integral part of these financial statements.
  6




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GRAND CANYON EDUCATION, INC.
Notes to Financial Statements
(In thousands, except share and per share data)
(Unaudited)
 1. Nature of Business
  2. Summary of Significant Accounting Policies
 Unaudited Interim Financial Information
  Derivatives and Hedging
       Fair Value of Financial Instruments
   7




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GRAND CANYON EDUCATION, INC.
Notes to Financial Statements
(In thousands, except share and per share data)
(Unaudited)
 Exit Costs
   Accrued Exit Costs
    
    
    
    
    
    
    
    
    
    
    Accrued Exitat December 31,
    
    
    
    
    
    
    
    
    
    
    Costs at March2009
    
    
    Exit Costs
    
    
    Payments to Date
    
    
    31, 2010Severance payments
    
    $
    503
    
    
    $
    
    
    
    $
    (503
    )
    
    $
    Future lease payments, net of estimated sublease rentals
    
    
    288
    
    
    
    89
    
    
    
    (64
    )
    
    
    313Leasehold improvements and other
    
    
    41
    
    
    
    
    
    
    
    (1
    )
    
    
    40Total
    
    $
    832
    
    
    $
    89
    
    
    $
    (568
    )
    
    $
    353
 Comprehensive Income
  Use of Estimates
  Segment Information
  Reclassifications
  Recent Accounting Pronouncements
     3. Restatement of Financial Statements
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GRAND CANYON EDUCATION, INC.
Notes to Financial Statements
(In thousands, except share and per share data)
(Unaudited)
  4. Earnings Per Share
   Three Months Ended March 31,2010
    
    
    2009Denominator:Basic weighted average shares outstanding
    
    
    45,673,917
    
    
    
    45,474,318Effect of dilutive stock options and restricted stock
    
    
    650,856
    
    
    
    347,000Diluted weighted average shares outstanding
    
    
    46,324,773
    
    
    
    45,821,318
 5. Valuation and Qualifying Accounts
 Balance at
    
    
    
    
    
    
    
    
    
    
    Balance atBeginning of
    
    
    Charged to
    
    
    
    
    
    
    End ofPeriod
    
    
    Expense
    
    
    Deductions(1)
    
    
    PeriodAllowance for doubtful accounts receivable:Three months ended March 31, 2010
    
    $
    7,553
    
    
    
    4,774
    
    
    
    (4,479
    )
    
    $
    7,848Three months ended March 31, 2009
    
    $
    6,356
    
    
    
    3,295
    
    
    
    (3,583
    )
    
    $
    6,068
 (1)
    
    Deductions represent accounts written off, net of recoveries. 6. Accrued Liabilities
  March 31,
    
    
    December 31,2010
    
    
    2009Accrued compensation and benefits
    
    $
    15,478
    
    
    $
    11,898Accrued interest
    
    
    92
    
    
    
    94Deferred rent
    
    
    238
    
    
    
    244Tax reserves, non-income tax related
    
    
    501
    
    
    
    229Tax reserves, income tax related
    
    
    631
    
    
    
    568Other accrued expenses
    
    
    6,187
    
    
    
    5,070$
    23,127
    
    
    $
    18,103
 7. Commitments and Contingencies
 Leases
  2010
    
    $
    2,8512011
    
    
    3,7892012
    
    
    3,3532013
    
    
    3,5822014
    
    
    3,333Thereafter
    
    
    12,545Total minimum payments
    
    $
    29,453
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GRAND CANYON EDUCATION, INC.
Notes to Financial Statements
(In thousands, except share and per share data)
(Unaudited)
 Legal Matters
  qui tam qui tam
 qui tam qui tam qui tam qui tam
 qui tam qui tam
 qui tam
  Tax Reserves, Non-Income Tax Related
  8. Income Taxes
   10




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GRAND CANYON EDUCATION, INC.
Notes to Financial Statements
(In thousands, except share and per share data)
(Unaudited)
 9. Share-Based Compensation
   Summary of Stock Options OutstandingWeighted
    
    
    WeightedAverage
    
    
    AverageExercise
    
    
    Remaining
    
    
    AggregateTotal
    
    
    Price per
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Share
    
    
    Term (Years)
    
    
    Value ($)(1)Outstanding as of December 31, 2009
    
    
    3,349,996
    
    
    
    12.30Granted
    
    
    848,800
    
    
    
    21.10Exercised
    
    
    (41,855
    )
    
    
    12.00Forfeited, canceled or expired
    
    
    (16,585
    )
    
    
    15.21Outstanding as of March 31, 2010
    
    
    4,140,356
    
    
    $
    14.10
    
    
    
    8.93
    
    
    $
    49,850Exercisable as of March 31, 2010
    
    
    1,054,421
    
    
    $
    12.01
    
    
    
    8.64
    
    
    $
    14,899Available for issuance as of March 31, 2010
    
    
    2,026,283
 (1)
    
    Aggregate intrinsic value represents the value of our closing stock
price on March 31, 2010 ($26.14) in excess of the exercise price
multiplied by the number of options outstanding or exercisable. Share-based Compensation Expense
  2010
    
    
    2009Instructional costs and services
    
    $
    379
    
    
    $
    83Selling and promotional
    
    
    37
    
    
    
    35General and administrative
    
    
    621
    
    
    
    646Share-based compensation expense included in operating expenses
    
    
    1,037
    
    
    
    764Tax effect of share-based compensation
    
    
    (415
    )
    
    
    (306
    )Share-based compensation expense, net of tax
    
    $
    622
    
    
    $
    458
 Restricted Stock Grants
  10. Regulatory
     11




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion of our historical results of operations and our liquidity and capital
resources should be read in conjunction with the financial statements and related notes that appear
elsewhere in this report.
 Forward-Looking Statements
 Managements Discussion and Analysis of
Financial Condition and Results of Operations
  
    
    our failure to comply with the extensive regulatory framework applicable to our
industry, including Title IV of the Higher Education Act and the regulations thereunder,
state laws and regulatory requirements, and accrediting commission requirements;
    
    the results of the ongoing investigation by the Department of Educations Office of
Inspector General and the pending qui tamaction regarding the manner in which we have
compensated our enrollment personnel, and possible remedial actions or other liability
resulting therefrom;
    
    the ability of our students to obtain federal Title IV funds, state financial aid,
and private financing;
    
    risks associated with changes in applicable federal and state laws and regulations
and accrediting commission standards;
    
    our ability to hire and train new, and develop and train existing, enrollment
counselors;
    
    the pace of growth of our enrollment;
    
    our ability to convert prospective students to enrolled students and to retain
active students;
    
    our success in updating and expanding the content of existing programs and
developing new programs in a cost-effective manner or on a timely basis;
    
    industry competition, including competition for qualified executives and other
personnel;
    
    risks associated with the competitive environment for marketing our programs;
    
    failure on our part to keep up with advances in technology that could enhance the
online experience for our students;
    
    the extent to which obligations under our loan agreement, including the need to
comply with restrictive and financial convenants and to pay principal and interest
payments, limits our ability to conduct our operations or seek new business
opportunities;
    
    our ability to manage future growth effectively;
    
    general adverse economic conditions or other developments that affect job prospects
in our core disciplines; and
    
    other factors discussed under the headings Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of Operations.
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Overview
     March 31,2010
    
    
    2009# of Students
    
    
    % of Total
    
    
    # of Students
    
    
    % of TotalGraduate degrees(1)
    
    
    16,213
    
    
    
    41.7
    %
    
    
    14,128
    
    
    
    49.8
    %Undergraduate degree
    
    
    22,641
    
    
    
    58.3
    %
    
    
    14,265
    
    
    
    50.2
    %Total
    
    
    38,854
    
    
    
    100.0
    %
    
    
    28,393
    
    
    
    100.0
    %
 March 31,2010
    
    
    2009# of Students
    
    
    % of Total
    
    
    # of Students
    
    
    % of TotalOnline(2)
    
    
    35,796
    
    
    
    92.1
    %
    
    
    25,758
    
    
    
    90.7
    %Ground(3)
    
    
    3,058
    
    
    
    7.9
    %
    
    
    2,635
    
    
    
    9.3
    %Total
    
    
    38,854
    
    
    
    100.0
    %
    
    
    28,393
    
    
    
    100.0
    %
 (1)
    
    Includes 615 and 162 students pursuing doctoral degrees at March 31, 2010 and 2009, respectively.(2)
    
    As of March 31, 2010 and 2009, 43.4% and 52.2%, respectively, of our Online students are pursuing
graduate degrees.(3)
    
    Includes both our traditional on-campus ground students, as well as our professional studies students. Critical Accounting Policies and Use of Estimates
  Factors affecting comparability
  Spirit transaction and related borrowings
  13




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Results of Operations
  Three Months Ended March 31,2010
    
    
    2009Net revenue
    
    
    100.0
    %
    
    
    100.0
    %Operating expensesInstructional cost and services
    
    
    35.6
    
    
    
    32.4Selling and promotional
    
    
    30.1
    
    
    
    35.3General and administrative
    
    
    12.2
    
    
    
    15.9Exit costs
    
    
    0.1
    
    
    
    0.0Royalty to former owner
    
    
    0.1
    
    
    
    0.1Total operating expenses
    
    
    78.1
    
    
    
    83.8Operating income
    
    
    21.9
    
    
    
    16.2Interest expense
    
    
    (0.4
    )
    
    
    (1.2
    )Interest income
    
    
    0.1
    
    
    
    0.2Income before income taxes
    
    
    21.6
    
    
    
    15.2Income tax expense
    
    
    8.8
    
    
    
    6.1Net income
    
    
    12.9
    
    
    
    9.2
 Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009
 Net revenue
 Instructional cost and services expenses
 Selling and promotional expenses
 General and administrative expenses
 Interest expense
 Income tax expense (benefit)
 Net income
  14




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Seasonality
  Liquidity and Capital Resources
 Liquidity
   Cash Flows
 Operating Activities
 Investing Activities
 Financing Activities
 Contractual Obligations
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    5 YearsLong term notes payable
    
    $
    25.6
    
    
    $
    1.6
    
    
    $
    3.9
    
    
    $
    19.7
    
    
    $
    0.4Capital lease obligations
    
    
    1.4
    
    
    
    0.5
    
    
    
    0.9
    
    
    
    0.0
    
    
    
    0.0Purchase obligations(1)
    
    
    71.1
    
    
    
    47.3
    
    
    
    23.4
    
    
    
    0.4
    
    
    
    0.0Operating lease obligations
    
    
    29.3
    
    
    
    2.8
    
    
    
    7.1
    
    
    
    6.9
    
    
    
    12.5Total contractual obligations
    
    $
    127.4
    
    
    $
    52.2
    
    
    $
    35.3
    
    
    $
    27.0
    
    
    $
    12.9
 (1)
    
    The purchase obligation amounts include expected spending by period
under contracts that were in effect at March 31, 2010. Less than one
year represents expected expenditures from April 1, 2010 through
December 31, 2010. Off-Balance Sheet Arrangements
  Non-GAAP Discussion
    15




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##### Table of Contents




    
    cash expenditures for capital expenditures or contractual commitments;
    
    changes in, or cash requirements for, our working capital requirements;
    
    interest expense, or the cash requirements necessary to service interest or
principal payments on our indebtedness;
    
    the cost or cash required to replace assets that are being depreciated or
amortized; and
    
    the impact on our reported results of earnings or charges resulting from (i)
royalties to our former owner, including amortization of royalties prepaid in connection
with our settlement, (ii) exit costs, and (iii) share-based compensation.
   Three Months Ended March 31,(In thousands)
    
    2010
    
    
    2009Net income
    
    $
    11,480
    
    
    $
    5,075Plus: interest expense net of interest income
    
    
    283
    
    
    
    558Plus: income tax expense (benefit)
    
    
    7,834
    
    
    
    3,376Plus: depreciation and amortization
    
    
    2,587
    
    
    
    1,558EBITDA
    
    
    22,184
    
    
    
    10,567Plus: royalty to former owner(a)
    
    
    74
    
    
    
    74Plus: exit costs(b)
    
    
    89
    
    
    
    Plus: share-based compensation(c)
    
    
    1,037
    
    
    
    764Adjusted EBITDA
    
    $
    23,384
    
    
    $
    11,405
 (a)
    
    Reflects the amortization of prepaid royalties recorded in conjunction with a settlement with the former owner.(b)
    
    Represents exit costs as a result of the closure of the student services facility in Utah during the fourth
quarter of 2009. This amount represents increased costs related to an adjustment in the estimated sublease
rentals associated with the leased space.(c)
    
    Reflects share-based compensation expense relating to stock and option grants made to employees and directors. 
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Impact of inflation.
 Market risk
   16




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##### Table of Contents



Interest rate risk
 
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting.
  
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
 qui tam qui tam
 qui tam qui tam
 qui tam qui tam
 qui tam
  
 Item 1A.
    
    Risk Factors
   17




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Recent Sales of Unregistered Securities
  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Reserved
 
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
  Number
    
    Description
    
    Method of Filing3.1
    
    
    Amended and Restated Certificate of Incorporation.
    
    Incorporated by
reference to
Exhibit 3.1 to
Amendment No. 6 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on November 12,
2008.3.2
    
    
    Amended and Restated Bylaws.
    
    Incorporated by
reference to
Exhibit 3.2 to
Amendment No. 6 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on November 12,
2008.4.1
    
    
    Specimen of Stock Certificate.
    
    Incorporated by
reference to
Exhibit 4.1 to
Amendment No. 2 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on September
29, 2008.4.2
    
    
    Amended and Restated Investor Rights Agreement,
dated September 17, 2008, by and among Grand
Canyon Education, Inc. and the other parties
named therein.
    
    Incorporated by
reference to
Exhibit 4.2 to
Amendment No. 2 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on September
29, 2008.31.1
    
    
    Certification of Chief Executive Officer
pursuant to Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
    
    Filed herewith.31.2
    
    
    Certification of Chief Financial Officer
pursuant to Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
    
    Filed herewith.32.1
    
    
    Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. 
    
    Filed herewith.32.2
    
    
    Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. 
    
    Filed herewith.
 
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Company, whether made before or
after the date hereof, regardless of any general incorporation language in such filing.  18




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##### Table of Contents



SIGNATURES
  GRAND CANYON EDUCATION, INC.Date: May 4, 2010
    By:
    /s/ Daniel E. BachusDaniel E. BachusChief Financial Officer

(Principal Financial Officer and 
Principal Accounting Officer)  19




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##### Table of Contents



Number
    
    Description
    
    Method of Filing3.1
    
    
    Amended and Restated Certificate of Incorporation.
    
    Incorporated by
reference to
Exhibit 3.1 to
Amendment No. 6 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on November 12,
2008.3.2
    
    
    Amended and Restated Bylaws.
    
    Incorporated by
reference to
Exhibit 3.2 to
Amendment No. 6 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on November 12,
2008.4.1
    
    
    Specimen of Stock Certificate.
    
    Incorporated by
reference to
Exhibit 4.1 to
Amendment No. 2 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on September
29, 2008.4.2
    
    
    Amended and Restated Investor Rights Agreement,
dated September 17, 2008, by and among Grand
Canyon Education, Inc. and the other parties
named therein.
    
    Incorporated by
reference to
Exhibit 4.2 to
Amendment No. 2 to
the Companys
Registration
Statement on Form
S-1 filed with the
SEC on September
29, 2008.31.1
    
    
    Certification of Chief Executive Officer
pursuant to Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
    
    Filed herewith.31.2
    
    
    Certification of Chief Financial Officer
pursuant to Rules 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
    
    Filed herewith.32.1
    
    
    Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. 
    
    Filed herewith.32.2
    
    
    Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. 
    
    Filed herewith.
 
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Company, whether made before or
after the date hereof, regardless of any general incorporation language in such filing.  20